Submitted By
Ahmad M. Zayyad, Deputy Village Manager / Interim Director of Development Customer Services
Reviewed By
LKS
Agenda Item Title
Title
A Resolution Authorizing the Submission of a Grant Application for the Illinois Homeowner Assistance Fund Home Repair Program (HAFHR) Administered by the Illinois Housing Development Authority (IHDA) With an Anticipated Funding Amount of $5,000,000
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Overview
Overview
Staff is requesting that the Board adopt a Resolution authorizing staff to submit a grant application to the Illinois Housing Development Authority for $5,000,000 to allow eligible homeowners earning less than 150% of the Area Median Income (AMI) the ability to address home repairs that were delayed and exacerbated due to the COVID-19 pandemic.
End
Recommendation
Recommendation
Adopt the Resolution.
Background
The Illinois Housing Development Authority (IHDA) announced $25 million in funding for the Illinois Homeowner Assistance Fund Home Repair Program (HAFHR) to allow eligible homeowners, who are earning less than 150% of the Area Median Income (AMI), the ability to address home maintenance needs that were delayed and exacerbated due to the COVID-19 pandemic. Funding for the program is provided under section 3206 of the American Rescue Plan Act of 2021 (ARPA) which established the Homeowner Assistance Fund (HAF).
HAFHR will award grants ranging from $1 to $5 million to nonprofits and/or governmental entities. Grantees will, in turn, make home repairs using grants of up to $60,000 per eligible homeowner.
Eligible repairs include measures to make necessary repairs and/or replacements that help the homeowner maintain the habitability of the home. Examples include, but are not limited to:
• Addressing health, safety and code violations;
• Roofing, soffit/fascia/gutters, drainage and runoff management;
• Electrical and plumbing systems;
• Foundations, existing decks and existing porches;
• Modifications and improvements for accessibility to allow the elderly or disabled to age in place;
• Environmental modification and improvements;
• Soft costs, including title search, inspection, recording fees, lead wipes and lab fees, and termite inspection and treatments.
• Other vital and necessary repairs specific to the home’s needs.
The scope of the home repair work will be determined by the grantee, in consultation with the homeowner. Work will be completed as per state and local building codes and will include lead paint testing, which will be deducted from the grant award. Payments will be made directly to contractors by the grantees, on behalf of the homeowner. Funds will not have to be paid back and the program will be free to homeowners; however, the home repair grants will carry a 3-year forgivable recapture agreement, amortizing 1/36 per month. The purpose of the forgivable recapture agreement is to notify IHDA if a homeowner sells the property within the first three years post rehab. If they do, the proportionate amount of the grant will be due in full to IHDA. The forgivable recapture agreement will be recorded against the property, but it is not a mortgage and therefore cannot be used to foreclose.
Homeowner eligibility for HAF Home Repair Program requires the following:
• Certify a financial hardship after January 21, 2020, related to the COVID-19 pandemic.
• Have income <150 percent of the area median income.
• Own and occupy the property as their primary residence.
• Be current on their mortgage payment OR not have a mortgage payment.
• Reverse mortgage, home equity line of credit, contract for deed or ownership held in a trust are all ineligible ownership models for this program.
• Homeowners who received HAF housing assistance are eligible to apply.
Property types eligible for the program include:
• Single-family home
• Accessory Dwelling Unit (ADU)
• 2-to-4-unit building (common areas and owner-occupied units are eligible)
• Condominium or Cooperative
• Manufactured home on a permanent foundation, where the homeowner owns the land, and the property is taxed as real estate
Property types ineligible for the program include:
• Investment properties
• Properties primarily used for business (more than 50% of the floor space is used for business)
Eligible applicants for HAFHR must be nonprofit and/or governmental entities with demonstrated experience in owner-occupied home repair, including, but not limited to, marketing the program, qualifying, and selecting homeowners, maintaining a waitlist, preparing scope of work and cost estimates, managing bids, repair work oversight, performing onsite inspections, grant management and payouts, and reporting according to federal and state standards. The Village meets these requirements.
The Village currently offers the Single Family Rehabilitation Program (SFR) through HUD’s Community Development Block Grant (CDBG) funds that allows homeowners earning less than 80% of the Area Median Income (AMI) the ability to obtain a 20 year, $25,000 loan with zero percent interest and no payments until the house is sold or the end of the term. The SFR program will be enhanced as eligible homeowners will be able to qualify for both programs. Combining the two programs also allows the Village to meet their HUD rehabilitation goals.
The HAFHR grant is a one-year award with one 12-month renewal and one 9-month renewal. The total program grant period with all renewals would run from January 1, 2024 through September 20, 2026. 25% of the grant funds must be disbursed by September 30, 2024, for the grantee to be considered for the 12-month grant renewal. 65% of the grant funds must be disbursed by September 30, 2025, for the grantee to be considered for the 9-month grant renewal. IHDA, in its sole discretion, may grant exceptions to these measures.
The program will provide 15 percent for administration costs to the Village. If fully funded, the program will assist 72 households.
Village Staff submitted a tentative grant proposal on Monday, July 31 as required by the Funding Application distributed by the Illinois Housing Development Authority (IHDA). The application requests $5,000,000 to support the projects described above. If the resolution is not approved, staff will withdraw that application. If the Board adopts the Resolution and IHDA approves the application, the Village will need to enter into an agreement with IHDA that would come before the Board for approval in the Fall of 2023.
Fiscal Impact
The program will provide 15 percent for administration costs. If funded, the grant would add revenue for staff wages and salaries as well as contracted services for lead paint testing and hazard controls. No expenditure is impacted.
DEI Impact
This grant would provide additional funds to families earning less than 80% of the AMI who participate in the Community Development Block Grant (CDBG) Single Family Rehabilitation (SFR) Program. Currently, the maximum amount of the program loan is $25,000.
This grant would aid those residents earning less than 150% of the area median income (AMI) who are outside the guidelines of our current rehabilitation program guidelines of earning less than 80% of AMI. These households earning between 80% AMI and 150% AMI fall into the group of earning too much to qualify for some programs but don’t earn enough to provide for families living in Oak Park.
The impacted populations will be engaged through social media and local groups. Families who previously did not qualify for the SFR program will be contacted.
This program endorses DEI throughout the Village by providing to households in need of assistance.
Alternatives
If the Resolution is not adopted, staff will withdraw the grant application.
Previous Board Action
On October 15, 2012, the Village Board approved a resolution authorizing the execution of an agreement between the Illinois Housing Development Authority (IHDA) and the Village of Oak Park to administer a Home Modification Forgivable Loan Program.
Citizen Advisory Commission Action
N/A
Anticipated Future Actions/Commitments
N/A
Intergovernmental Cooperation Opportunities
N/A